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Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 10122
Experience:  Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
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I am a US citizen. My wife and I owned a piece of ocean

Customer Question

I am a US citizen. My wife and I owned a piece of ocean front land in southern Baja, Mexico for 11 years and sold it for a modest profit. We never developed it. I paid capital gains in Mexico. The Notario and my Mexican realtor stated that because of the trade agreement with Mexico and the US I do NOT have to also pay capital gains tax in the US. My CPA is saying that the US will still calculate the gain and tax accordingly but I will get a credit for the amount I paid to Mexico. the amount he is telling me I still owe is thousands of dollars. Do I have to pay in both countries?
Submitted: 2 months ago.
Category: Capital Gains and Losses
Expert:  Lane replied 2 months ago.

Hi. I can help here. My name's Lane

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Yes, so sorry. As a US citizen you are taxed on all worldwide income.

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The Foreign tax credit does help to alleviate the double taxation but IS limited by a factor that has to do with the proportion of your income that is US source income to that of the other country.

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Please don't shoot the messenger here.

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let me know if you have any questions at all.

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Lane

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice on three continents, since 1986.

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